Friday, October 31, 2014

Black proposes chicken auction

Glenn Black of Providence Bay says Ontario chickens would be better sold by auction than under the current cost-of-production pricing formula.

He proposes an auction similar to the Dairy Farmers of Ontario market-clearing auction for pricing quota.

He further suggests that the auction begin with the most efficient producers – i.e. those with the lowest cost of production – and gradually scale down to eventually cover all producers.

The Ontario Farm Products Marketing Commission, which is reviewing the chicken board’s cost-of-production formula, is refusing to listen to Black’s proposals.

It has also refused to provide information about its process to Restaurants Canada and has denied that organization the right to participate as an “intervenor” or to observe its deliberations.

Given the commission’s response to the powerful Restaurants Canada organization – whose members rank second as buyers of Ontario chicken – Black, who raises one bird a year, stands little chance of influencing the outcome. Too bad because he pours a lot of research into the positions he takes.

Black writes on his blog, , that “currently there is false data in the marketplace about supply and demand, and these are frequently manipulated in a cyclic fashion so as to maximize the power and profits of the various players.

“Due to vertical and horizontal integration of the supply-managed (SM) chicken industry, the cost of capital systems, land, chicken feed, and chicks can be easily manipulated, and are being manipulated so as to force the cost of production (COP) to move in desirable directions; defeating any sense of accurate price discovery by free market forces.

“SM was originally designed to give the lone family chicken farmer the system under which they can unite against the powerful agriculture & food conglomerates who had been using predatory practices against individual farmers,” Black writes.

“Today, 99 per cent of those chicken farmers have been forced out of business since 1921; majority of that reduction has occurred during CFO's existence. 

“The multi-national food and agriculture companies are even more powerful than 50 years ago.  The Chicken Farmers of Ontario (CFO  marketing board) has joined forces with their former enemy, and have used their government-created monopoly as a weapon to extract maximum profits for their special interest group out of the pocketbooks of Ontario consumers.

“In short, COP has become a weapon of choice used against the best interests of Ontario consumers.
“As an alternative to COP, we have proposed a simple public auction system for live chicken so that buyers and sellers can achieve accurate price discovery, and productivity and efficiency become the main driving forces to help consumers get affordable chicken, while farmers and processors are assured market stability and coverage of their costs and reasonable profit margins,” he writes.

“This would eliminate the need for COP and its constant tinkering each quota cycle at great cost, bias, and attempts to manipulate unfairly.”